Special Needs Trust Reporting Requirements

Temecula and Murrieta Elder Law Attorneys provide advice on Special Needs Trust reporting requirements. There are various types of Special Needs Trusts; the First Party Special Needs Trust (SNT)which is funded with assets that belong to the beneficiary and the Third-Party Special Needs Trust, sometimes called a Supplemental Needs Trust, that is funded with assets belonging to someone else, usually assets from a parent after they have died.

If the SNT is funded with assets after someone dies, there is no reason to report the SNT because the beneficiary’s financial situation has not changed.  

But when assets are titled in the name of the SNT, the trust and all the assets that are titled to that trust must be disclosed to the Department of Social Services (SSA) if the person is receiving SSI and reported to the Department of Health Services if the person is receiving Medi-Cal benefits. A copy of the trust and the initial funding inventory must be sent to the agency that is providing a needs-based benefit to the beneficiary. 

This must be done within ten days after the end of the month in which the trust is funded. Some public housing agencies require that the trust or trust distributions be reported on the annual recertification forms. Always include a cover letter explaining that the trust being provided is an SNT and the assets it owns should not be counted as belonging to the SNT beneficiary. 

It is important to reference the social security number of the beneficiary, and if the SNT is also being reported to the Medi-Cal agency, the beneficiary’s Medi-Cal number should be included.  This will allow the agencies to make sure the information is saved in the correct file.  Keep a copy of your letter and proof that you mailed it in case you need to prove at some later time that you did report the trust.

If the SSA or Medi-Cal notifies the beneficiary or the trustee that the assets in the SNT and the income it earns will be counted and not excluded, and that the individual’s public benefits will stop as a result, it is important that you speak to our Temecula and Murrieta Elder law or estate planning attorneys. To schedule an appointment at our Temecula office or one of our other offices located throughout the state of California, contact us at  (800) 244-8814

If you have any further questions about estate planning and strategies to shield your wealth, or if you’d like to have your current asset protection plan reviewed to make sure it still meets your needs, please contact us at our California asset protection office at 800-244-8814 to set up a consultation.